Interdependence Theory, China and American Security Interests

Abstract

This research examines how the economic relationship between the United States and China impacts the potential for dyadic conflict. We employed Interdependence Theory to explain this relationship. Our purpose is to examine the strengths and weaknesses of Interdependence Theory as a framework for weighing the potential for conflict between the US and China.

We investigated the reforms Deng started in 1978 and examined how China has economically opened to the world, becoming one of the world’s rising economic powers. The remainder of our methodology was designed around four tests. In the first test, we examined the US-China economic relationship unaided by Interdependence Theory methodology. We found that dyadic integration was very high and complex. Similar to Oneal and Russett, we found that the two states have a very high level of economic integration, which translates into a significant reduction in the potential for conflict. The examination of actual dyadic conflicts suggests but does not prove that the level of conflict has been reduced as a result of Interdependence.

In our next test we examined an alternative interpretation of Interdependence Theory offered by Gelpi and Grieco. They posit that Interdependence’s conflict-suppressing influence is diminished if either state is autocratic. This theory would have strong implications for the US-China dyad, but in the end, our research found this variant of the theory is not yet substantiated enough to consider reformulating the overall theory.

The last test was a consideration of Interdependence’s value in explaining two dyadic events, China’s entry in the World Trade Organization and the 1995-96 Taiwan Strait Crisis. Interdependence was useful for predicting future behavior, and in general the theory is a necessary, if not sufficient, tool for explaining the relationship between conflict and integration. Our policy recommendations supported maintaining economic engagement as a core element of US strategy, creating additional mechanisms to reduce trade friction, and promoting democracy in China in order to further reduce the potential for conflict. In general, our research supports the use of Interdependence theory as a means of both understanding economic relationships and formulating foreign policy.